Ubisoft 2012 Annual Report Download - page 181

Governance and Internal control
2012
176
1.8.2.4 CONTROL ACTIVITIES
In addition to the risk management system, the Group has many control processes at all levels of the
Company. Functional departments at head office play a critical role by ensuring that subsidiaries’
initiatives comply with Group guidelines, and by providing support for risk management, especially
when local teams lack sufficient expertise.
The centralized organization of these support functions enables consistent dissemination of the major
policies and goals of the senior management:
 The management control department monitors the Company’s performance, using operational
monitoring based on monthly reports from all Group subsidiaries. It also coordinates meetings
between senior management and the operational and finance departments at which the various
reporting indicators are reviewed, the differences between actual performance and initial forecasts
are analyzed, and the interim and annual forecasts can be fine-tuned on the basis of actual figures
and market outlook as received from local and operational teams. The financial controllers monitor
the whole financial reporting cycle and constantly query subsidiaries on their performance levels,
earnings and business activity.
 The consolidation department draws up the Group’s monthly consolidated accounts, centralizing
all advice on their preparation and analysis. It publishes the accounting procedures applicable
within the Group, particularly via the Group’s accounting policies manual. It ensures compliance
with applicable standards and regulations so as to provide a true picture of the Group’s business
activities and position.
 The treasury department arranges foreign exchange derivative contracts and coordinates cash
flow management at French and foreign subsidiaries, in particular by overseeing the dissemination
of cash pooling solutions and cash flow forecasting. It checks the suitability and smooth interaction
of exchange rate and liquidity risk management policies, as well as the publication of financial
information, and also manages off-balance sheet commitments (bank guarantees relating to
purchase financing or L/Cs, comfort letters, share price guarantees, deposits, etc.).It centralizes
and verifies the authorizations granted to a limited number of employees, who are exclusively
authorized by senior management to handle certain financial transactions - subject to predefined
thresholds and authorization procedures - and helps implement tools to ensure effective control
(double signature procedure, secure payment mechanisms, frequently updated authorization and
signature system, controlled IT access, etc.).
 Acquisitions are managed by the acquisitions department, which reports to the finance
department, examines and assesses the strategic interest of the planned total or partial takeover
of a company and submits the relevant proposal to senior management, which makes the final
decision. No Group subsidiary can make this decision on its own.
 Legal departments, which are specialized in company law, contract law, litigation and intellectual
property, assist and advise the subsidiaries on legal matters (acquisitions, contracts, leases, stock
market regulations, corporate governance, etc.).They coordinate joint studies or those of interest
for the Group, and support local entities on legislative issues so as to control risks in the various
fields.
 The tax department assists and advises the Group’s French and foreign companies with the
analysis of the tax aspects of their projects. In coordination with the various internal departments,
it ensures the Group’s tax security by organizing risk prevention, identification and management. It
implements the Group’s transfer price policy and ensures that this is applied correctly.
 The information systems department is involved in selecting IT solutions, and ensures their
technical and functional compatibility. One of its principal aims is integrating those solutions and,
in particular, it oversees changes to the ERP applications (PeopleSoft - Oracle) deployed in many
subsidiaries. It also regularly monitors IT projects and ensures that they are in line with the
requirements identified by the functional teams and the budgets approved by management. As a
result, medium-term project visibility has been introduced, with budgets set for a 2-year period,